How Lawmakers Can Rein in Regulations Like the Student Loan Bailout - FEBRUARY 28, 2023
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F E B R UAR Y 2 8 , 2 0 2 3
How Lawmakers Can Rein
in Regulations Like the
Student Loan Bailout
Haley Holik Alli Fick
Senior Fellow Research Director
TheFGA.org/paper/lawmakers-can-rein-in-regulations-like-student-loan-bailoutKEY FINDINGS
THE STUDENT LOAN SCHEME COULD
COST TAXPAYERS MORE THAN $1 TRILLION.
THE BIDEN ADMINISTRATION USED FACT SHEETS
AND A PRESS RELEASE TO PUSH A COSTLY
PROGRAM AND SIDESTEP CONGRESS.
FEDERAL LAWMAKERS SHOULD PASS THE
REINS ACT TO REQUIRE CONGRESSIONAL
APPROVAL OF COSTLY REGULATIONS
BEFORE THEY CAN TAKE EFFECT.
THE BOTTOM LINE:
CONGRESS CAN REIN IN COSTLY RULES AND COMBAT
UNLAWFUL AGENCY GUIDANCE BY REQUIRING
APPROVAL BEFORE REGULATIONS ARE IMPLEMENTED.Overview
In August 2022, President Biden announced the latest in his record-breaking spending spree—his
plan to push hundreds of billions of dollars in student loan bailouts.1-2 The Biden administration’s
sweeping plan would wipe out up to $20,000 in student loans for millions of borrowers.3-4 President
Biden all but admitted the plan was illegal.5 Unsurprisingly, the administration announced their plan
shortly before hotly contested midterm elections.6-7
All told, the plan could carry a price tag of more than $1 trillion over 10 years.8 Hardworking
Americans—including people that decided not to go to college or who have already paid off their
student loans—will be left footing the bill.9
Multiple lawsuits were filed to halt the Biden administration’s legally questionable student loan
cancellation plan, with the Supreme Court hearing Biden v. Nebraska in early 2023.10-12 Regardless
of the case outcome, there are commonsense policies that could have put an end to the $1 trillion
scheme.
REGARDLESS OF THE CASE OUTCOME, THERE ARE
COMMONSENSE POLICIES THAT COULD HAVE
PUT AN END TO THE $1 TRILLION SCHEME.
Federal lawmakers should pass the Regulations from the Executive in Need of Scrutiny (REINS) Act
to require congressional approval of regulations that cost $100 million or more before they can take
effect. Congress should also provide clarity that guidance—like the Biden administration’s student
loan cancellation plan—is subject to the Congressional Review Act (CRA). To prevent bureaucrats
from sidestepping the congressional review process, Congress should require significant guidance to
undergo the rulemaking process. Strengthening legislative oversight on executive actions will protect
taxpayers and rein in out-of-control spending.
The Biden administration’s student loan plan could
cost taxpayers more than $1 trillion
The current U.S. national debt hovers around a staggering $31.5 trillion.13 Yet President Biden is
on a record-shattering spending spree. Under the Biden administration, bureaucrats have issued
more costly regulations than any other president in modern history.14 In 2021, agencies finalized
69 major regulations—regulations with an annual $100 million price tag.15 In just his first year,
President Biden added more than $200 billion in new regulatory costs.16
The administration’s student loan scheme will only continue to fuel record-breaking federal
spending.17 According to the Penn Wharton Budget Model, the total price tag for the plan could
be more than $1 trillion over the next 10 years.18 Worse yet, the actual cost of the plan could reach
even higher.
3
HOW LAWMAKERS CAN REIN IN REGULATIONS LIKE THE STUDENT LOAN BAILOUT | FEBRUARY 28, 2023 | TheFGA.orgThe Biden administration used fact sheets and a
press release to sidestep Congress
Congress must authorize agencies to issue a rule. Rules have the force and effect of law, so must go
through notice-and-comment procedures to allow for public input. Guidance is not subject to the
same procedures as notice-and-comment rules, as it is not supposed to substantively change the law.
Guidance comes in a variety of forms, such as press releases, fact sheets, frequently asked
questions, and memos. Given the lack of obstacles, agencies may use guidance to sidestep
safeguards like notice and comment.19 While guidance documents are not subject to the same
procedural requirements as rules, they can in effect be legally binding, which allows agencies to
call something “guidance” that functions like a rule.20
The Biden administration went a step further with its use of unlawful guidance by using it to
thwart a citizen lawsuit. President Biden used guidance like fact sheets and a press release to
initiate the costly program.21 In September 2022, a citizen lawsuit was filed over the mass student
loan cancellation program, and the Biden administration retroactively altered the details of the
issued guidance on government websites to try to avoid litigation.22
THE BIDEN ADMINISTRATION WENT A STEP FURTHER
WITH ITS USE OF UNLAWFUL GUIDANCE BY USING
IT TO THWART A CITIZEN LAWSUIT.
Congress can combat unlawful agency guidance
The CRA allows Congress to use expedited procedures to pass legislation to disapprove
regulations.23 Under the CRA, Congress can use the fast-track procedures to overturn regulations if
agencies submit them to Congress.24 Guidance documents are subject to the CRA—however, while
agencies consistently submit notice-and-comment rules, they are less consistent in submitting
guidance to Congress.25
Right now, Congress must pass legislation to disapprove a regulation. Federal lawmakers should
strengthen the congressional review process by requiring major regulations—those with an
annual price tag of $100 million or more—to be approved by Congress before they can take effect.
Federal lawmakers should strengthen the
congressional review process by requiring major
regulations—those with an annual price tag of
$100 million or more—to be approved by
Congress before they can take effect.
4
HOW LAWMAKERS CAN REIN IN REGULATIONS LIKE THE STUDENT LOAN BAILOUT | FEBRUARY 28, 2023 | TheFGA.orgFederal lawmakers should also clarify that guidance documents are subject to the congressional
review process. Though Congress has overturned guidance using congressional review procedures,
it could strengthen regulatory oversight by making clear that review requirements apply to more
than notice-and-comment rules.26
Unlike rules, guidance documents are not subject to the full notice-and-comment process. As a
result, agencies may fail to submit costly guidance for congressional review.27 To ensure agencies
submit the most expensive regulations for review, Congress should force agencies to follow
notice-and-comment procedures when issuing significant guidance that carries a price tag of at
least a $100 million.
THE BOTTOM LINE: Congress can rein in costly rules
and combat unlawful agency guidance by requiring
approval before regulations are implemented.
Lawmakers should act to prevent agencies from using guidance to skirt Congress and public input.
Multiple lawsuits were filed to stop the Biden administration’s student loan bailouts, with the
Supreme Court taking up Biden v. Nebraska in early 2023.28-30 Regardless of the outcome, there
are commonsense policies that could have stopped the $1 trillion regulatory initiative.
Lawmakers should act to prevent
agencies from using guidance to skirt
Congress and public input.
Congress can prevent future potential vote-buying schemes by requiring congressional approval
of costly rules and guidance before they are implemented. Federal lawmakers should pass the
REINS Act to require congressional approval of regulations costing $100 million or more.
Lawmakers should also strengthen oversight on bureaucrats by clarifying that guidance documents
are subject to the congressional review process and forcing agencies to follow notice-and-comment
procedures when issuing significant guidance.
5
HOW LAWMAKERS CAN REIN IN REGULATIONS LIKE THE STUDENT LOAN BAILOUT | FEBRUARY 28, 2023 | TheFGA.orgREFER ENC E S
1. Jonathan Ingram et al., “Congress must rein in President Biden’s regulatory spending spree to tame inflation,” Foundation for
Government Accountability (2022), https://thefga.org/paper/congress-must-rein-spending-to-tame.inflation.
2. Joe Biden, “Remarks by President Biden announcing student loan debt relief plan,” The White House (2022), https://www.
whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces.student-loan-relief-for-
borrowers-who-need-it-most.
3. Federal Student Aid, “The Biden-Harris administration’s student debt relief plan explained,” U.S. Department of Education (2022),
https://studentaid.gov/debt-relief-announcement.
4. The White House, “Fact sheet: The Biden-.Harris administration’s plan for student debt relief could benefit tens of
millions of borrowers in all fifty states,” The White House (2022), https://www.whitehouse.gov/briefing.room/statements-
releases/2022/09/20/fact-sheet-the-biden-harris-administrations-plan-for-student-debt-relief-could.benefit-tens-of-millions-of-
borrowers-in-all-fifty-states.
5. Tarren Bragdon, “How to stop the next student debt cancellation fiasco,” Daily Caller (2022), https://dailycaller.com/2022/09/20/
bragdon-how-to-stop-the-next-student-debt-cancellation-fiasco.
6. The White House, “Fact sheet: The Biden-.Harris administration’s plan for student debt relief could benefit tens of
millions of borrowers in all fifty states,” The White House (2022), https://www.whitehouse.gov/briefing.room/statements-
releases/2022/09/20/fact-sheet-the-biden-harris-administrations-plan-for-student-debt-relief-could.benefit-tens-of-millions-of-
borrowers-in-all-fifty-states.
7. Tarren Bragdon, “How to stop the next student debt cancellation fiasco,” Daily Caller (2022), https://dailycaller.com/2022/09/20/
bragdon-how-to-stop-the-next-student-debt-cancellation-fiasco.
8. Junlei Chen and Kent Smetters, “The Biden student loan forgiveness plan: Budgetary costs and distributional impact,” University
of Pennsylvania Wharton School of Business (2022), https://budgetmodel.wharton.upenn.edu /issues/2022/8/26/biden-student-
loan-forgiveness.
9. Biden v. Nebraska, Nos. 22-506 & 22-535, Brief amicus curiae of Foundation for Government Accountability (2023), https://www.
supremecourt.gov/DocketPDF/22/22-506/253650/20230201105752060_22-506%20-535%20bsac%20The%20Foundation%20
for%20Government%20Accountability.pdf.
10. Lexi Lonas, “Where student loan forgiveness stands: Legal fight shifts to Supreme Court,” The Hill (2023), https://thehill.com/
education/3796397-where-student-loan-forgiveness-stands-legal-fight-shifts-to-supreme-court.
11. SCOUTSblog, “Biden v. Nebraska,” SCOTUSblog (2023), https://www.scotusblog.com/case-files/cases/biden-v.nebraska.
12. Anna Nova, “Supreme Court challenges to Biden student loan plan hinge on overreach, financial harm,” CNBC (2023), https://
www.cnbc.com/2023/02/02/explaining-legal-challenges-to-bidens-student-loan-forgiveness.plan.html.
13. “US national debt,” U.S. Debt Clock.org (2023), https://www.usdebtclock.org.
14. Jonathan Ingram et al., “Congress must rein in President Biden’s regulatory spending spree to tame inflation,” Foundation for
Government Accountability (2022), https://thefga.org/paper/congress-must-rein-spending-to-tame.inflation.
15. Ibid.
16. Ibid.
17. Gabriel T. Rubin and Amara Omeokew, “Biden’s student-debt-forgiveness plan may cost up to $1 trillion, challenging deficit
goals,” Wall Street Journal (2022), https://www.wsj.com/articles/bidens-student-debt.forgiveness-plan-may-cost-up-to-1-trillion-
challenging-deficit-goals-11662370201.
18. Junlei Chen and Kent Smetters, “The Biden student loan forgiveness plan: Budgetary costs and distributional impact,” University
of Pennsylvania Wharton School of Business (2022), https://budgetmodel.wharton.upenn.edu /issues/2022/8/26/biden-student-
loan-forgiveness.
19. Congressional Research Service, “Agency use of guidance documents,” Congressional Research Service (2021), https://sgp.fas.org/
crs/misc/R45248.pdf.
20. Ibid.
21. Garrison v. U.S. Department of Education, Civil Action No.: 1:22-cv-1895 (S.D. Ind. 2022), https://pacificlegal.org/wp-content/
uploads/2022/09/2022-09-27-garrison-v-department-of-education-complaint.stamped.pdf.
22. Biden v. Nebraska, No. 22A444, Brief amicus curiae of the States of Utah, Ohio, Alabama, Arizona, Alaska, Florida, Georgia,
Indiana, Louisiana, Mississippi, Montana, New Hampshire, North Dakota, Oklahoma, Texas, West Virginia, and Wyoming (2022),
https://www.supremecourt.gov/DocketPDF/22/22-506/247371/20221123114518033_Motion%20for%20Leave%20to%20File%20
Brief%20-%20FINAL.pdf.
23. 5 U.S.C. §§ 801-808.
24. Ibid.
25. Congressional Research Service, “The Congressional Review Act: defining a ‘rule’ and overturning a rule an agency did not submit
to Congress,” Congressional Research Service (2019), https://crsreports.congress.gov/product/pdf/IF/IF11096.
26. Ibid.
27. Congressional Research Service, “The Congressional Review Act: Which ‘rules’ must be submitted to Congress,” Congressional
Research Service (2019), https://sgp.fas.org/crs/misc/R45248.pdf.
28. Lexi Lonas, “Where student loan forgiveness stands: Legal fight shifts to Supreme Court,” The Hill (2023), https://thehill.com/
education/3796397-where-student-loan-forgiveness-stands-legal-fight-shifts-to-supreme-court.
29. SCOUTSblog, “Biden v. Nebraska,” SCOTUSblog (2023), https://www.scotusblog.com/case-files/cases/biden-v.nebraska.
30. Anna Nova, “Supreme Court challenges to Biden student loan plan hinge on overreach, financial harm,” CNBC (2023), https://
www.cnbc.com/2023/02/02/explaining-legal-challenges-to-bidens-student-loan-forgiveness.plan.html.
6
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